Share Share on LinkedIn Share via Email Print Securitization in Focus — May 2025 6 June 2025 Asset-backed securities A late-month surge brought May ABS issuance to $32.2 billion — edging slightly ahead of the $31.9 billion total from May 2024. Year-to-date supply stands at $135.3 billion, trailing the $146.2 billion posted by this point last year. ABS issuance ($B) ABS outstanding ($B) Change in consumer outlook (%) Consumer confidence has declined while inflation expectations have climbed — reflecting ongoing uncertainty around tariff implementation and its potential impact on prices and employment. Source: The Conference Board, Bloomberg. Big Beautiful Bill and solar industry Termination of the Residential Clean Energy Credit — Ends the 30% Investment Tax Credit (ITC) for homeowners who own their solar systems, affecting roughly half of US installations. Clean Electricity Investment Credit phaseout — Removes the 30%–60% ITC for solar lease providers that own systems and lease them to homeowners. Supply chain disruption — A new proposal targeting Foreign Entities of Concern would bar solar firms from sourcing components from certain foreign suppliers, impacting parts from China. Commercial mortgage-backed securities CMBS issuance ($B) Delinquencies (%) The overall CMBS delinquency rate rose to 7.08% — up 0.05% for the month and 2.11% year over year. Four of the five major property sectors improved, but an uptick in Office (from 10.28% to 10.59%) pushed the overall rate higher. Industrial (-0.02%), retail (-0.13%) and multifamily (-0.46%) saw modest declines, while lodging dropped significantly — falling from 7.85% to 6.39%, a 146 bps decrease. The percentage of seriously delinquent loans (60+ days past due, in foreclosure, real estate owned or non-performing) ticked up to 6.59% — a 0.05% monthly increase. Residential mortgage-backed securities Housing update Housing market mixed Existing home sales remain soft, but new home sales have strengthened. Price gains are moderating, and affordability is slowly recovering from historic lows. Existing home supply rises Inventory for existing homes climbed to 4.2 months — the highest level since June 2020, signaling some easing in supply constraints. New home supply tightens The supply of new homes dropped from 9.1 to 8.1 months, pointing to increased absorption amid steady builder activity. Mortgage activity ticks up Purchase applications are slightly above 2023 levels but continue to hover near historic lows, reflecting persistent affordability challenges. Government-Sponsored Enterprise (GSE) privatization heats up again Implicit vs explicit guarantee — GSEs have long operated under an implicit government guarantee — backing assumed but not officially stated. Even Fannie Mae’s MBS prospectus notes that obligations are not guaranteed by the US. A shift to an explicit guarantee would mark a major policy change. Policy confusion deepens — A recent Trump tweet called for taking GSEs public while retaining their “implicit guarantee” — effectively making it explicit. The message adds ambiguity to the administration’s stance. Uncertain Path Forward — The administration has discussed public ownership without full privatization — keeping GSEs under government control. Treasury Secretary Bessent suggested action will follow “peace deals, trade deals and tax deals,” signaling a long timeline. Sources: Deutsche Bank, Trepp, JP Morgan. The views expressed are those of the author as of June 2025 and are subject to change without notice. These opinions are not intended to be a forecast of future events, a guarantee of future results or investment advice. Investing involves risk, including the possible loss of principal. Past performance is not a guarantee of future results.
Inside Today's Bond Market: Policy Proposals and Credit Crosscurrents 26 February 2026 From proposed housing and credit card reforms to expanding securitized issuance, Fixed Income Portfolio Specialist Douglas Gimple breaks down what’s new in bond markets — and what it means for investors. (22 min podcast) Listen
Securitization in Focus — December 2025 14 January 2026 Securitized markets posted strong results across ABS, RMBS and CMBS, supported by elevated issuance and steady credit trends. (3 min read) Read